A breakdown of commercial and multifamily construction data in top US metropolitan areas
The return of demand for apartments, condos and commercial real estate made 2022 a landmark year in the history of construction starts and brought considerable construction activity along with it.
We started the year publishing our Top 10 MSAs list for 2022 and already at the end of Q1, there were a few shakeups. Most notably: Los Angeles broke into the top 10, edging out Seattle.
Combined, the metropolitan areas of New York; Dallas; Washington, DC; and Miami accounted for almost half of the commercial and multifamily starts across the top 16 metropolitan areas last year — meaning these cities are ready for droves of people to move in and call it home. New York led the pack with an impressive $37.8 billion, which accounts for roughly 12% of all US commercial and multifamily starts.
While the top MSAs shows a return to major metros like NYC, it simultaneously presents a different story for other metros. Beacon metros on either coast show the impact of high living costs in those parts of the country. Demand was in decline in Los Angeles and Boston as more people moved out to the suburbs. Secondary metros and suburbs can be cheaper than the cities they surround; LA and Boston were the only two metros in the top 16 to see declines in commercial and multifamily construction starts in 2022. And, as we pointed out, LA still broke over Seattle; affordable or not.
Moreover, the data indicates that not only were people leaving bigger metros, but they were also moving to more affordable states like Texas. When looking at Texas metros, the influx of people is bolstering the very robust increases seen in Dallas, Austin and Houston across 2021 and 2022.
It’s a competitive climb to the top 10. And it will remain so: commercial and multifamily starts across the top 16 metropolitan areas improved 30% in 2022, up substantially from 18% growth in 2021.
The second half of the year is shaping up to be a challenging one. Be sure to check back soon for the MSA data mid-year update to see which cities entered — or fell out of — the top 10 in the first half of 2023.